On 30 June 2017, the Australian Parliamentary Joint Committee on
Intelligence and Security (PJCIS) released its
report on the Telecommunications and Other Legislation Amendment
Bill 2016 (TSSR Bill). The PJCIS recommended that
the TSSR Bill, which will implement the telecommunications sector
security reforms announced by the Government in mid-2015, should be
passed, albeit with amendments. The amendments and other additional
steps recommended by the PJCIS in its June 2017 report are intended
to address industry concerns that the proposed legislation is
vague, would be difficult to interpret and costly to comply with.
Given the PJCIS has supported the TSSR Bill it seems likely that it
will be passed in 2017, noting it will be subject to a 12 month
implementation period.

Background

The PJCIS first recommended legislation to strengthen the
protection of Australia's telecommunications networks from
national security risks in its Report of the Inquiry into Potential
Reforms of Australia's National Security Legislation in
mid-2013.

An earlier version of the TSSR Bill was released for public
consultation in June 2015. In their joint media release announcing
the commencement of consultation, the Australian Attorney-General
and the Prime Minister (in his then role as Australian Minister for
Communications), noted that the intention of the proposed
legislation was to provide a security framework to strengthen
Australia's ability to manage national security risks to
telecommunications networks, given Australia's increasing
economic and social dependence on those networks. The consultation
draft of the bill reflected the approach recommended by the PJCIS
and provided for:

Telecommunications carriers, as well as carriage service
providers and intermediaries, to be obliged to:

protect their networks from unauthorised access and
interference; and

notify the Government of changes to networks and management
systems that could adversely affect their ability to protect their
networks.

Direction and information gathering powers to be granted to the
Secretary of the Attorney-General's Department.

The obligations imposed on the sector were to be in addition to
other legislative protections, including under the
Telecommunications (Interception and Access) Act 1979
(Cth) (TIA Act), which requires regulated entities
to notify planned changes to services or systems that are likely to
have an adverse effect on a relevant entity's ability to secure
its systems and under the Telecommunications Act 1997
(Cth), which provides a power to the Attorney-General to direct a
relevant telecommunications company to cease operating its service
where operation of the service is or would be prejudicial to
security.

Although supportive of the goal of strengthening protection
against national security threats, industry stakeholders objected
to the 2015 consultation draft of the bill. These concerns centred
on the broad scope of the provisions of the bill and the
difficulties of interpreting vaguely worded provisions in the bill.
The bill was also seen as very prescriptive, with
telecommunications companies being required to comply with
directions relating to security risks, without general rights of
consultation or rights of appeal. Of course, the potential costs of
compliance were also seen as a concern.

Introduction of the TSSR Bill

The TSSR Bill was introduced into the Australian Senate on 9
November 2016. The Bill had been amended from the earlier draft to
reflect concerns raised in the consultations that occurred in 2015
and early 2016. For example:

Some clarification was made regarding the scope of the
obligation to protect telecommunications networks. This would only
apply to risks of unauthorised access and interference for the
purposes of security.

The powers to issue directions would be vested only in the
Attorney-General, not the Secretary of the Attorney-General's
Department.

Restrictions would be imposed around the power to issue
directions. For example, the Attorney-General would only be
permitted to issue directions where the Australian Security
Intelligence Organisation (ASIO) has issued an
adverse security assessment and if consultation with the impacted
company and the Minister for Communications had occurred (amongst
other conditions). In addition, decisions to issue a direction
would be reviewable under the Administrative Decisions
(Judicial Review) Act 1977 (Cth).

On being introduced, the TSSR Bill was promptly referred to the
PJCIS. That referral provided an opportunity for stakeholders to
raise remaining concerns with the terms of the TSSR Bill.

Recommendations of Parliamentary Committee on the TSSR
Bill

The PJCIS released its report on the TSSR Bill on 30 June 2017,
a delay from the proposed release date of April 2017. The PJCIS
recommended that TSSR Bill should be passed, subject to a number of
amendments being made and other actions being taken.

The amendments to the TSSR Bill supported by the PJCIS include,
amongst other things:

Inserting provisions requiring a three year review by the PJCIS
of the operation of the legislation, including consideration of the
security of critical and sensitive data, the adequacy of
information sharing arrangements between the Government and
industry and how well the administrative guidelines (discussed
further below) operate to provide clarity to industry.

Reflecting a concern regarding the security of data held
offshore as required by the new data retention provisions of Part
5-1A of the TIA Act, including a requirement for notification of
any new or amended arrangements for holding that data
offshore.

The PJCIS also placed great emphasis on the proposed
administrative guidelines for the TSSR Bill, which will be issued
by the Government to assist regulated entities in determining what
is required to comply with the security and notification
obligations in the TSSR Bill. The PJCIS recommendations regarding
the guidelines included:

The guidelines should provide greater detail and certainty for
industry, including by providing clarification of an entity's
obligations, for example, where it uses telecommunications
infrastructure but does not own or operate it, where any of its
infrastructure is located outside Australia or where it provides
over-the-top services or cloud computing and storage services.

The guidelines should provide greater detail regarding the
changes to telecommunications services or systems that will, or
will not, be required to be notified to the Government's new
Communications Access Co-ordinator.

The PJCIS also recommended greater sharing of information by the
Government with industry, including regarding security threats,
though this would occur outside the legislation and the
administrative guidelines.

What happens now?

The Prime Minister had hoped that the TSSR Bill would be passed
in the recently completed 2017 Winter Parliamentary sittings, but
this did not occur. Given the recommendation from the PCJIS, which
has bipartisan support, that the TSSR Bill should be passed it
would seem likely that it will be passed, potentially with the
amendments recommended by the PJCIS, in Parliamentary sittings to
be held later in 2017. Once the legislation commences, there will
then be a 12 month implementation period to comply with the new
requirements. Unfortunately there will remain uncertainty for
industry as the administrative guidelines will be further amended
during this implementation period.

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